AIG Specialty Insurance Company and Liberty Mutual Insurance Company allege in a proposed class action lawsuit that Laboratory Corporation of American Holdings—LabCorp—is not entitled to coverage from the insurance companies for an $11 million settlement agreement reached in a 2014 lawsuit that was filed by a Florida man over alleged Fair and Accurate Credit Transactions Act (FACTA) and Fair Credit Reporting Act (FCRA) violations.
“LabCorp settled the class action by agreeing to pay the sum of $11,000,000 without the consent or knowledge of AIG Specialty or Liberty Mutual,” the lawsuit wages. “Indeed, LabCorp never advised AIG Specialty or Liberty Mutual about the ongoing settlement negotiations, and it ignored AIG Specialty’s repeated requests for information regarding the class action.”
The Florida man’s class action against LabCorp that laid the groundwork for this lawsuit alleged the company unlawfully printed too many digits and/or expiration numbers of class members’ debit or credit cards on point-of-sale receipts. This lawsuit alleges that after the settlement was preliminarily approved, LabCorp demanded AIG Specialty pay “its entire $10 million policy limits and that Liberty Mutual pay the remainder of the settlement amount,” including more than $2.3 million in attorneys’ fees. The insurance giants argue LabCorp breached its policies and is therefore entitled to no coverage for the $11 million deal.